Circular no 36 29th August 2008 by hxtMEE65


                                                      Phone& Fax: 033 – 25734176/ 9831233798(M)

All India Regional Rural Bank Employees Association
President: Ajit Ghosh                                 GOLDERS GREEN, Ground Floor F .G. Block
General Secretary: Dilip Kumar Mukherjee              1, Nazrul Islam Avenue (V.I.P. ROAD)
                                                      Kaikhali, Kolkata – 52

Circular no.-36                                                                     Date:-29-08-2008

The General Secretary,
All Units / State Federations / C.C. members

Dear comrades,

    As circulated earlier, Finance Minister had his meeting with the RRB Chairmen in the presence of
the representatives of G.O.I, RBI, NABARD and Sponsor Banks at New Delhi on 27.08.2008. This
meeting continued from 10a.m. to 1 p.m. The following issues were discussed.
Review of Performance of RRBs
Sources of Funds, Owned Funds, Deposits, Loans & Advances Outstanding, Loans Issued, Credit
Deposit Ratio, Gross Non-performing Assets (NPA), Accumulated Losses, Profitability & Viability, Net
Other issues discussed
       1. Action Taken Report (ATR) on the decisions taken in the 3rd Review Meeting held on 07
           February 2008
       2. Amalgamation of RRBs
       3. Recapitalisation of RRBs
       4. Covering of uncovered districts
       5. Branch Expansion Programme
       6. Farmers’ Clubs (FCs)
       7. Kisan Credit Card (KCC)
       8. Net NPA
       9. Current Viability
       10. Financial Inclusion
       11. Scheduling of amalgamated RRBs
       12. Computerization in RRBs
       13. Human Resources Issues
       14. Training for officers and other staff of RRBs
       15. Offering new products through RRBs such as Insurance
       16. Co-branding of products and the services with sponsor banks
       17. Agriculture Insurance
       18. CGFTMSE of SIDBI
       19. Fresh Issues for discussions
Discussion in between A.I.R.R.B.E.A and G.O.I. on 28.08.08 at New Delhi
G.S. AIRRBEA along with Shri S. Venkateswar Reddy, Secretary, AIRRBEA had discussion with Shri
Arun Ramanathan, Secretary, Financial Services & Shri Tarun Bajaj, Joint Secretary (Bank &
Insurance), Ministry G.O.I on 28th August at 12:30 p.m. in two phases with lunch break up to 4 p.m. The
following issues were discussed
1. Rescheduling of RRB
Our views- RBI should declare all the amalgamated RRBs as “Scheduled” as per RRB act at one stroke.
Govt. views- As per statute, RRBs with negative networth and/or having higher NPA can not be
declared as “scheduled” by RBI immediately unless NABARD submits the eligibility status. So, 25
RRBs having no negative net worth will be declared as “scheduled” within a fortnight. 14 RRBs will be
declared “scheduled” by 31st December 2008 with the completion of capitalisation process. Out of 45
amalgamated RRBs, the rest 6 will be done by the March 2009. AIRRBEA wanted that let the RRBs with
accumulated loss be given the opportunity to show “profit” with the amount of “debt relief” to make
them eligible.
2. National Software for CBS in RRBs
Our views- AIRRBEA while submitting its representation before CBS Committee demanded for
“National Rural Network” for RRBs and other Rural Credit institutions. CBS Committee has reviewed 3
options including National Software but ultimately recommended for sponsor bank wise software. We
placed before Shri Ramanathan all the logics for “National Software” incase of CBS for RRBs by
NABARD or jointly by NABARD and P.N.B or SBI.
Govt. views - RBI has asked for views from all quarters. So let the RBI take a final decision but G.O.I
raised the question of funding for national software since sponsor banks will contribute 25% of the
fund required for CBS in their sponsored RRBs. We expressed that an amount of RS. 1200 crore will be
required for “National Software” and this may be borne by G.O.I. NABARD and partly by profit making
3. Pending Parity of Pension Benefit, removal of Upper limit of P.F/Pensionable Salary-
While firmly sticking to the demand of parity of pension benefit, AIRRBEA did not object to the interim
proposal of removal of upper limit of P.F./Pensionable salary as a step towards parity of pension but
AIRRBEA is fully opposed to the idea of revising the upper limit of P.F./Pensionable salary from 6500 to
Rs. 10000 instead of withdrawal of upper limit. AIRRBEA demanded that there must not be upper limit
for P.F. in line with Commercial Bank Staff.

G.O.I views-G.O.I observed that G.O.I is presently considering all the options for P.F. and Pension for
R.R.B. subject to availability of fund at the RRB lavel to meet the requirement of current and arrear
payment. They also sought the help of AIRREBA in this regard.

4. Parity of Other allowance - G.O.I observed that the Apex level Associations will have to negotiate
with “Negotiating Forum” to be formed by G.O.I for RRB Staff during 9th bipartite settlement. AIRRBEA
observed that parity of financial benefits available to equated cadre is not negotiable. For the Issue of
non-implemention of computer allowance by S.B.I and Central Bank of India, joint Secretary will take
up with the respective sponsor bank.
5. Benefit of Additional Sicks leave- The issue is pending with Secretary, Financial Services for some
minor clarification. The order will be issued very soon.
6. Negotiating Forum
Our views – We submitted the details and its authority etc. again as already submitted to
Govt. views – The file in this regard is at final stage and will be placed by the Joint Secretary to the
Secretary, Financial Services for approval on 29.08.08.
7. Throat Committee Recommendation –approval by G.O.I
Main parts of the recommendation of Throat Committee was circulated by our CIRCULAR no.18 dated
24.10.2007 and published in our journal for the month of December 2007. Main parts were also given to
all the CC members in the CC meeting on 16.12.2007 at Kolkata. The full text of the summary
recommendation was published in our Hindi journal also in November 2007.

We have not received the approved copy but learnt that more or less the recommendation given by Dr.
Throat committee and published by us has been accepted with the some modifications.
1. Volume of business for Categorisation of branches as suggested by Throat Committee has totally
been accepted in spite of our strong protest with a demand to reduce the volume of business from 6
crore to 3 crore for scale-II branches.

The approved Category of branches
               Branch Category                                         Business level
                         A                         Up to Rs. 6 crore
                         B                         Above Rs. 6 crore and Up to Rs. 20 crore
                         C                         Above Rs. 20 crore and Up to Rs. 50 crore

                         D                         Above Rs. 50 crore and up to Rs. 100 crore
                         E                         Above Rs. 100 crore

Other Issues
1. The RRBs will be categorised mainly on volume of business and not on no. of branches.
2. There shall be one Controlling Office for 51-75 branches, 2 Controlling Offices between 76 to 125
branches and so on. No area office.
 3. All the “Controlling Offices” will be termed as “Regional Office”.
 4. The designation of clerical cadre will be “Office Assistant” and the designation of Messenger will be
“Office Attendant “
5. Chairman should be 1 cadre higher than G.M. and the G.M. will be 1 cadre higher than the R.M.
6. Eligibility criteria will be reduced by 1 year for each part of C.A.I.I.B. exam. passed.
7. From Scale-III to Scale-IV- 4 years service required, Scale-IV to Scale-V- 3 years service is required.
8. Selection of “Chairman” and “General Manager” will be from RRB officers but may be posted at any
of the R.R.B.s of the same Sponsor Bank in the country.
Positive parts
    1. Authority for creation of “vacancy” both for recruitment and promotion-Board of Management
has been given the full authority as per guide lines issued by G.O.I etc.
    2. Written test for promotion, where required by Promotion test can be conducted by the RRB or
         Sponsor bank or IBPS as per decision of the Board.
    3. 25% of the clerical vacancy will be filled up by promotion from messenger. (At present, it is 10%)
    4. There will be consequential vacancy in the lower cadre as and when any promotion will take
         place from any cadre
    5. For recruitment in any cadre, computer knowledge is desirable but not compulsory
    6. Both “Seniority cum-merit” and “Merit cum-seniority” channels have been approved.
Negative parts
    1. G.O.I has approved the list of jobs for outsourcing as suggested by Throat Committee and
         empowered the sponsor bank to check the list periodically.
    2. From Scale-I to Scale-II, in case of promotion, 75% will go for “general category” by promotion
         and 25% to “Specialist” category through direct recruitment.
    3. Up to 6 crore of business, there will be only one officer of Scale-I when Throat Committee
         suggested for “Two officers” for a branch from 4 crore to 6 crore business. G.O.I has also
         reduced the number of officers for the branches with more than 100 crore where Throat
         committee suggested for 12 officers of different cadres.
Our views before G.O.I. - We strongly protested against the negative parts of the recommendation
approved by G.O.I. incase of out sourcing, catagorition of branches, neglect of service to poorer sector
in terms of outreach and Govt. Sponsor schemes and in favour of time bound promotion, promotion for
backlog quota etc. We pointed out that the average deposit and advance for RRB in terms of amount is
far below than the commercial bank since RRBs are to serve the weaker section, it will be impossible
for 1 officer and 1 clerk along with 1 messenger to attend so many customers in addition to pressure
of S.H.G and Govt. sponsor programme based beneficiaries.

   More over in the branches of hilly/desert/terrorist area and majority of the branches in North
   Eastern Region, Uttarakhand, Kashmir valley area will never attain 6 crore business. So in such
   areas, the officers will have to retire as Scale-I officer and naturally no workman will get promotion.

   More over the Chairman and G.M. to be selected from highest cadre of the RRB Staff should be
   posted in the same state to avoid language problem and to ensure personal feel.

    Views G.O.I – Since the G.O.I has finally approved the report with some modification, the file cannot
    be reopened now but all such suggestions may be considered after words. Of course, sponsor
    banks have been given the authority to approve additional 2.5% staff of any cadre, if and where
8. Recruitment- Our views- While AIRRBEA fully appreciates the requirement for “Recruitment” but is
highly afraid of the problem of attrition (leaving the job) of the newly recruited staff in the RRB.
Normally the rate of attrition is about 50% but in some RRBs it is 100% i.e. all recruited staff in the last
1 year in 3 RRBs have left the job. We have suggested that let the in-service candidates be absorbed in
higher cadres and/or G.O.I may allow “no age bar” for “in-service candidates” in case of recruitment
from the open market.
G.O.I views- G.O.I will consider the problem of “attrition” seriously.
9. Amendment of RRB Staff Recruitment-cum-Promotion Rule 1998
Views of AIRRBEA- It was pointed out that approval of the recommendation of Throat Committee will
be of no value till the RRB staff Promotion Rule 1998 is amended accordingly. Throat Committee had
suggested the full text of proposed amendment of RRB Staff Promotion Rule in line with
recommendation. AIRRBEA has already submitted its own observation and suggestions there on. This
must be amended immediately.

G.O.I views- G.O.I was of the wrong view that the Service Rule Amendment Committee will take care of
it. We made it clear that amendment of RRB Staff Service Rule 2000 has nothing to do with the
amendment of Promotion Rule. So G.O.I agreed to amend the Promotion Rule in consultation with
NABARD immediately.

10. RRB Staff Service Rule Amendment Committee-
Though it is too late but yet G.O.I has appointed the Committee and AIRRBEA has appreciated it
G.O.I has notified the above noted committee with the following officials
         1. Shri Amaresh Kumar, E.D., NABARD – Chairman
         2. Shri U.N. Srivastava, C.G.M.,(Law)- Secretary
         3. Shri M.K. Malhotra, Deputy Secretary, Banking Division, G.O.I.- Member
         4. Shri K.J. Tawri, G.M., S.B.I, Mumbai,- Member
         5. Shri Elangovan, G.M. IOB, Chennai - Member
         6. Shri Subhas Bose, Chairman, South Malabar Gramin Bank- Member
         7. Shri Basab Mandal, Chairman, Satpura Malwa Gramin Bank- Member
Terms of reference-
     1. To suggest the amendment of existing RRBs Staff Service Regulation 2000
     2. To suggest as to whether there would be two Separate Service Regulations for workman &
     3. Any other issue in this regard
This committee has been appointed on 22.08.2008 & has been asked to submit its report by 22.11.2008.
11. Further amalgamation of RRBs- AIRRBEA demanded the next stage of amalgamation i.e. state level
RRB as recommended by as committee. There are some steps like Assam, W.B, Bihar, Uttarakhand etc.
where there are only 1 “stand alone” RRB. In some states, there are only 2 “stand alone” RRBs. So
there must be “State lavel” RRB in the next phase.
G.O.I views- They gave a patient hearing but did not make any comment.
12. Capital Support to RRBs-AIRRBEA demanded that pending release of capital support by the
respective State Govt., let the rest 85% of the capital support be released to RRB. G.O.I did not agree.
G.O.I informed us that at present only it is a problem with Orrissa, Maharastra and J&K State Govt. All
the rest State Govts either released or going to release.
Govt. funds with RRB- AIRRBEA proposed that both Central Govt. and State Govt. must keep their fund
with RRB to the extent of involvement of the respective RRB in the respective schemes for
implementation in the District. So, no question of begging or asking mercy. G.O.I took a serious note of
it for taking appropriate decision.
Many other issues relating to inefficiency of some sponsor banks and indifference of some RRBs
Chairman etc. were also discussed with all seriousness.
U.F.B.U Programme for strike on 24.09.08 & 25.09.08
AIRRBEA will extend all possible fraternal support. Units may be requested to extend solidarity
support to U.F.B.U in all the programmes. Details being circulated separately.

                                                                            Yours Comradely

                                                                            Dilip Kumar Mukherjee
                                                                            GS, AIRRBEA


To top